Company Spotlights / Market Commentary

Could this Hydrogen Tech Company be the Next Trillion Dollar Opportunity?

  • Declan O’Flaherty

    Declan holds a Bachelor of Commerce from the University of Alberta and has over 4 years of experience investing in financial markets. As a fundamental investor, Declan embraces the investment principles of Warren Buffett and his disciples. This puts a focus on finding businesses with healthy financials, competent and accountable leader, enduring competitive advantages, and those that are selling at discount to what they are worth.

dynaCERT (TSX: DYA) is on the cusp of a major market catalyst. This Canadian company has invested over $100 million in developing next-generation carbon emission reduction technology and the time has come for it to reap its reward. 

With many developed nations, including Canada, the European Union, and Japan imposing strict carbon taxes on GHG emitters, not only will dynaCERT benefit from expansive carbon credit opportunities, set to produce $1.1 trillion annually by 2050, but its tech is a game changer in the combustion engine market, helping operators reduce their carbon footprint while upgrading their engines’ efficiency and useful life. This is leading to new revenue streams, reduced maintenance costs, and fewer greenhouse gas emissions left by its customers.

The thing is that dynaCERT is the only company producing these results. There are other players in the market, but none come close to the technological enhancements dynaCERT has to offer. With a fresh $5.4 million raised in its latest funding round, the company is set to advance its operations even further.

Today, dynaCERT’s technology produces up to an 88.7% reduction in NOx emissions, a 46.7% reduction in CO emissions, and a 9.6% reduction in CO2 emissions. You would be hard-pressed to find another company achieving this performance. 

So how does it work? Let’s dive in.

dynaCERT’s HydraGEN™ Technology

What separates dynaCERT from the competition is its proprietary HydraGEN™ technology. The company has spent roughly 19 years, invested over $100 million, and secured more than 27 patents worldwide while developing this next-generation system.

HydraGEN™ works by producing measured amounts of hydrogen and oxygen gases from distilled water that are then fed to the air intake of an internal combustion engine. This is conducted using dynaCERT’s unique patented and computerized system located within each HydraGEN™ unit.

For customers, this serves as a major catalyst for its engines resulting in greater power, better torque, improved fuel consumption, and fewer harmful gas emissions (CO, CO2, NOx).

But, this is an understatement. HydraGEN™ is truly a game changer for its customers and the environment. To prove it, dynaCERT went on a campaign, inviting global third-party entities to test its technology and validate its claims.

This includes:

  1. UOIT (University of Ontario Institute of Technology)
  2. PIT Group in Canada: evaluates technologies that promote efficient energy use in the commercial transportation, municipal, and transit industries across North America.
  3. Continental–EMITEC: develops pioneering technologies and services for sustainable and connected mobility of people and their goods.
  4. iCAT in India: The International Center for Automotive Technology in India 
  5. ABE Homologation from KBA (Kraftfahrt-Bundesamt, the Transport Ministry of Germany): ABE Homologation, which emanates from KBA, permits the marketing, sales, installation, and use of dynaCERT’s HydraGEN™ Technology in Germany and is utilized throughout the entire European Union. dynaCERT’s HydraGEN™ Technology is the only hydrogen gas supply system that has ever been approved by KBA and received Homologation for ABE Type Approval.

Across these entities, as well as independent testimonials from its customers, dynaCERT compiled a list of performance results produced by HydraGEN™. What they found was nothing short of impressive… 

When customers connect HydraGEN™ to their engines, they generate:

✔️ Up to a 10% reduction in Fuel Consumption

✔️ Up to an 88.7% reduction in NOx emissions

✔️ Up to a 46.7% reduction in CO emissions

✔️ Up to a 9.6% reduction in CO2 emissions

✔️ Up to a 57.1% reduction in THC emissions

✔️ Up to a 55.3% reduction in particulate matter (no black smoke)

✔️ Increased engine power and torque

✔️ Extended engine and oil life (lower maintenance costs)

✔️ Up to 60% reduction of Diesel Exhaust Fluid (DEF) usage

✔️ Reduction of Diesel Particulate Filter (DPF) replacement period by at least 33%

This is highly advantageous for multiple reasons. First, customers are cutting costs on fuel and replacement parts, while preserving the performance of their engines. dynaCERT highlights in its investor presentation that customers save roughly $0.08 per kilometer generating a payback and ROI of 8.25 months from installation.



Second, customers are drastically reducing the amount of greenhouse gas emissions they produce. Not only is this critical for improving the environment but it also creates a new revenue stream for both dynaCERT and its customers with the introduction of carbon credits (more on this later). 

Combined, these features create significant value for any customer seeking superior engine performance, a smaller carbon footprint, and potentially, an additional source of revenue. Given that this likely includes everyone using an internal combustion engine, dynaCERT is in the perfect position to serve a market with over 100 million new engines produced every year. Yet this is only the beginning of their ambitions.

But it gets better. dynaCERT recently partnered with Cipher Neutron whose state-of-the-art AEM Electrolyser feeds low-cost Green Hydrogen to a variety of new applications; this requires no use of precious metals and is backed by more than 22 years of research and development. With them in the mix, dynaCERT will add another high-value offering to its business, providing global customers pursuing Multi-Megawatt and Gigawatt hydrogen projects. This will enable them to generate clean Green Hydrogen where pressurized applications are important, at a lower cost of production. Green Hydrogen is valuable in that it helps reduce emissions, creates energy independence, and improves efficiency while being a highly versatile renewable resource. Together, dynaCERT and Cipher Neutron will help its customers progress to the next phase of the energy transition, establishing a lucrative venture for all.

dynaCERT’s Market Opportunities

Did you know that there are more than 1.3 billion internal combustion engines worldwide? This includes 145 million trucks in Europe, 711,000 trucking companies in the US, and 210 million trucks in South America and India. These internal combustion engines produce roughly 10% of the world’s greenhouse gas emissions, equating to approximately 1.5 billion tons of GHG emissions per year.

To serve this market and reduce the effects of greenhouse gasses, dynaCERT offers four versions of its HydraGEN™ systems:

  1. HG1 Series: for 10L to 15L Diesel Engines. This includes engines in passenger transport, power generation, construction, agriculture, and mining markets.
  2. HG2R Series: for 1L to 8L Diesel Engines. This includes engines in transportation, passenger transport, power generation, construction, and agricultural markets.
  3. HG4C: for 40L to 60L Diesel Engines. This includes engines in the power generation, heavy mining, and construction agreement markets.
  4. HG6C: for 60L to 90L Diesel Engines. This includes engines in the power generation, heavy mining, and construction agreement markets.

Already, HydraGEN™ systems are being tested and used in buses, refrigerated trailers, small trucks, class 8 trucks, power generators, farming equipment, construction equipment, and mining machines. In just the HG2 market alone, dynaCERT estimates that over 135 million engines, across North America, Europe, South Asia, and South America could benefit from a HydraGEN™ system.

This level of versatility speaks to the company’s vision: “To become the leader in the development of innovative solutions for a carbon-restricted economy. 

With nearly every internal combustion engine market covered, and more in its pipeline (passenger vehicles, small marine vessels, ocean vessels, and locomotives), dynaCERT has positioned itself as an essential supplier in the green economy.

So how does dynaCERT protect its moat?

As mentioned, developing a system like HydraGEN™ takes time. Not only does it require rigorous research & development, but it also requires certification on a global scale and a robust network to sell your products.

dynaCERT has made considerable efforts to obtain the position it holds today. The company spent over 19 years and $100 million to perfect the HydraGEN™ system. Throughout this period, it obtained 27 patents to protect its intellectual property and received global certification to ensure that it could operate in many of the top international markets. Moreover, it developed a system that produces superior results making it the go-to product in multiple verticals.

For a new entrant looking to penetrate the market, not only will they need to invest similar time and money to develop a similar product and receive the same certification, but they are also competing with a company (dynaCERT) that has established significant goodwill with its customers and continues to be the industry standard.

The barriers to entry are extremely high and even though the carbon credit boom is picking up steam, the capital (time and money) required to make a push seems almost out of reach. Fortunately, dynaCERT knew two decades ago that this was a tremendous opportunity and they have been preparing for this moment ever since.

The dynaCERT Model

dynaCERT operates a simple business model that allows it to reach and serve more than 55 countries worldwide.

To begin, the company assembles all of its products in Toronto, Canada. Then, dynaCERT distributes its completed systems through a sizable dealer network that consists of 48 qualified agents across the world. This network offers sales, marketing, and servicing services ensuring that all of dynaCERT’s customers, across 55 international markets, and even more industries, receive the same quality regardless of where they are located.

According to the company’s investor presentation, dynaCERT HydraGEN™ systems sell for roughly C$8,850 (w/ installation), though it depends on the location, engine size, vehicle, and voltage. This produces a profit margin of about 100% as the company can produce its systems at approximately 50% of the wholesale price.

But the real kicker is its carbon credit offering that is set to commence shortly.

Over the past couple of years, dynaCERT has been working closely with Verra to achieve its Verified Carbon Credit Standard (VCS). The VCS Program is the world’s leading voluntary program for certifying GHG emission reduction projects and is conducted solely by Verra and qualified third parties.

In 2021, dynaCERT obtained Verra VCS Methodology approval, and soon, they are expecting to achieve full certification. When they do, dynaCERT will be permitted to monetize Verra’s Verified Carbon Units (VCUs) (representing one metric tonne of carbon dioxide reduced or removed from the atmosphere) which could reach over $200/ton by 2050.

dynaCERT plans to split its revenue from these VCUs 50/50 with its customers making it a highly lucrative venture for both parties at no additional cost.

To track the VCUs, as well as the performance of its HydraGEN™ systems, the company developed the HydraLytica software. HydraLytica is a fully automated platform and is accessible anywhere with an internet connection. This allows both dynaCERT and its customers to see how much their fleets are saving on fuel, reducing emissions, and generating carbon credits. Moreover, it enables dynaCERT to manage and maintain HydraGENs™ from anywhere in the world.

Together, through the sale of its systems, generation of carbon credits, and the data gathered from HydraLytica, dynaCERT offers a comprehensive package, making it highly valuable for any business looking to improve its performance, and potentially, generate more income.

dynaCERT’s Leadership

At the top of dynaCERT’s leadership team is CEO, President, and Director, Jim Payne. Jim has been fundamental in dynaCERT’s strategic development since taking over in 2013.

As he outlines, Jim was born and raised in Southwest Ontario and began his career as a general contractor, like his father. This experience introduced him to the business world early on and enabled him to build a highly successful commercial construction company of his own. 

In addition, Jim took on ventures in the capital markets whereby he and a group of investors would analyze businesses and help them raise capital for their entrepreneurial endeavors. 

Around this time, he was introduced to dynaCERT, formerly known as Dynamic Fuel Systems, before the company went public. Immediately, Jim fell in love with the company’s mission, and between family, friends, and himself invested the first $5 million into the business. This gave him great insights into dynaCERT as he would closely follow its journey over the years; both failures and successes.

Eventually, Jim decided that if dynaCERT was to reach its full potential, it would require him to take a more active role. So in 2013, he was elected as its new President and CEO and embraced the responsibility of steering the business forward.

Since then, Jim has helped dynaCERT become the company it is today. Not only did he and the team help the company overcome the temporary closure of its operations during COVID-19, but they worked diligently throughout to position it as a highly sought-after supplier in this new market.

As you can see, Jim is very passionate about dynaCERT and the services it provides. He has stuck with it throughout all of the ups and downs and is determined to make it a globally recognized leader in the development of carbon emission reduction technologies.

Wrapping It UP

dynaCERT (TSX: DYA) is transforming the world for the better. The company has developed proprietary technologies that are improving the performance of internal combustion engines while significantly reducing the amount of greenhouse gases emitted into the atmosphere.

On top of that, dynaCERT is on the verge of receiving Verra’s VCS certification, allowing it to capitalize on the carbon credit market, expected to generate $1.1 trillion by 2050.

There are few companies so closely aligned with their stakeholders and the global population at large. dynaCERT is one of them.

If you would like to learn more about dynaCERT, check out its website below.

Learn more about dynaCERT here

Disclosure/Disclaimer:

We are not brokers, investment, or financial advisers; you should not rely on the information herein as investment advice. If you are seeking personalized investment advice, please contact a qualified and registered broker, investment adviser, or financial adviser. You should not make any investment decisions based on our communications. Our stock profiles are intended to highlight certain companies for YOUR further investigation; they are NOT recommendations. The securities issued by the companies we profile should be considered high risk and, if you do invest, you may lose your entire investment. Edge Investments and its owners have shares in the Company and have been compensated by dynaCERT for investor relations services. Edge Investments and its owners reserve the right to buy and sell shares in dynaCERT without further notice, which may impact the share price. Please do your own research before investing, including reading the companies’ public filings, press releases, and risk disclosures. The company provided information in this profile, extracted from public filings, company websites, and other publicly available sources. We believe the sources and information are accurate and reliable but we cannot guarantee it. The commentary and opinions in this article are our own, so please do your own research

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  • Declan O’Flaherty

    Declan holds a Bachelor of Commerce from the University of Alberta and has over 4 years of experience investing in financial markets. As a fundamental investor, Declan embraces the investment principles of Warren Buffett and his disciples. This puts a focus on finding businesses with healthy financials, competent and accountable leader, enduring competitive advantages, and those that are selling at discount to what they are worth.

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